.........."It’s a Long, Cold, Cashless Siege"
"It’s a Long, Cold, Cashless Siege," see http://www.nytimes.com/2008/04/13/business/13cash.html. Another major deflationary market (it was a market, past tense), auction-rate securities.
Here's part of the article:
"CRAIG JOFFE, an investor who owns a laser surgery business in Minneapolis, says that a couple of years ago he was looking for a safe place to put most of his life savings. So he said that on the advice of his broker, he invested 90 percent of his wealth in something he thought was just as conservative, reliable and liquid as cash: three auction-rate securities.
“They were sold to me as cash equivalents,” Mr. Joffe said. “In the fourth quarter of last year, I very explicitly said to my broker, ‘Do I have any market risk in these securities?’ and he said no. I’m usually a thorough guy, but my radar wasn’t up at all.”
It wasn’t until two months ago — when the cash-out window of the $330 billion auction-rate securities market slammed shut — that warning signs began flashing across the radar screens of many people like Mr. Joffe. With the market now frozen, investors like Mr. Joffe are in limbo, and many are having to report losses, if only on paper.
Institutional investors are also feeling the pain.
Thomas Martin, head of America’s Watchdog, a consumer protection advocacy group, says he has heard from more than 1,000 investors who cannot get the money out of these securities. He said they ranged from young people with $25,000 at stake to others with $1 million invested.
“The majority of people have $200,000 to $300,000 invested, but it’s their life savings, and they were told this was the same as a money market or C.D.,” Mr. Martin said. “I must have 50 or 60 people that were buying houses that were supposed to close in March and their earnest money is at risk of forfeiture because they relied on the liquidity in these things.”
While Mr. Joffe is still receiving interest payments on his securities, he is unable to retrieve his principal.
A UBS spokesman said that to help clients in need of liquidity, the firm had just begun a program to let them borrow 100 percent of the par value of their securities at a modest interest rate. "
.......http://www.JoeFROCKS.com/ .
Here's part of the article:
"CRAIG JOFFE, an investor who owns a laser surgery business in Minneapolis, says that a couple of years ago he was looking for a safe place to put most of his life savings. So he said that on the advice of his broker, he invested 90 percent of his wealth in something he thought was just as conservative, reliable and liquid as cash: three auction-rate securities.
“They were sold to me as cash equivalents,” Mr. Joffe said. “In the fourth quarter of last year, I very explicitly said to my broker, ‘Do I have any market risk in these securities?’ and he said no. I’m usually a thorough guy, but my radar wasn’t up at all.”
It wasn’t until two months ago — when the cash-out window of the $330 billion auction-rate securities market slammed shut — that warning signs began flashing across the radar screens of many people like Mr. Joffe. With the market now frozen, investors like Mr. Joffe are in limbo, and many are having to report losses, if only on paper.
Institutional investors are also feeling the pain.
Thomas Martin, head of America’s Watchdog, a consumer protection advocacy group, says he has heard from more than 1,000 investors who cannot get the money out of these securities. He said they ranged from young people with $25,000 at stake to others with $1 million invested.
“The majority of people have $200,000 to $300,000 invested, but it’s their life savings, and they were told this was the same as a money market or C.D.,” Mr. Martin said. “I must have 50 or 60 people that were buying houses that were supposed to close in March and their earnest money is at risk of forfeiture because they relied on the liquidity in these things.”
While Mr. Joffe is still receiving interest payments on his securities, he is unable to retrieve his principal.
A UBS spokesman said that to help clients in need of liquidity, the firm had just begun a program to let them borrow 100 percent of the par value of their securities at a modest interest rate. "
.......http://www.JoeFROCKS.com/ .
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, XAU
posted by Joe Ferrazzano at
1:58 PM
1 Comments:
Keep articles like this in mind when you read the gold pimps, who're always or almost always bullish, with every substantial dip a buying opportunity.
In the goofy twisted mindless Mickey Mouse world of the gold pimps major corrections/downcycles and Cyclical Bear Markets aren't supposed to/they don't point out that they ever happen.
I get BS comments from gold pimps and their friends EVERY day. You've seen some of them.
By
Joe Ferrazzano, at 3:12 PM
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